Guest Column

Joburg's plans to foster economic and racial integration

2018-04-23 08:00
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Herman Mashaba

The City of Johannesburg, like most of South Africa’s major cities, still carries the scars of apartheid-era spatial planning.

Our city was clearly designed to divide the haves from the majority have-nots; the latter still forced to live on the periphery, far away from economic opportunities in the city.

It is important to emphasise the spatial mismatch between housing and jobs because studies reveal that most South Africans spend up to 70% of their often meagre income on food and transport, especially to work. This is not to mention the time cost that people could better spend on leisure or with their families.

Added to the spatial mismatch the city is facing a housing crisis in terms of supply. 

We are faced with an estimated housing backlog of 300 000 units. In addition, about 3 000 people migrate into the City every month and they simply have nowhere to stay.

About 158 000 individuals are still languishing on the housing waiting list with thousands more living in the city’s 190 informal settlements.

It is clear that the situation needs action and we believe that the response must be two pronged. 

First we must diversify existing peripheral townships, to include more jobs and amenities. Second, the focus of this article, we must direct the provision of new housing to areas close to jobs, schooling and public transit.

In this regard, we are playing our part.

While government has a number of tools for affordable housing provision, from national and provincial schemes to the City’s own projects (including our Inner City plan) we believe that government can’t address the problem alone. We, like many cities across the world, believe that the private sector has a role to play in the provision of affordable housing. This role stems not only from a social responsibility, but also from the huge value that municipalities provide to developers in terms of land use rights. Some of this value must be returned to the residents of the city.

One way we can get ourselves out of this crisis is to rid ourselves of the mistaken belief that there is no good business to be done in the affordable or low-cost rental housing market. 

What better way can there be to do socially responsible business than to offer affordable housing to people who really need it?

The luxury and ultra-luxury property markets, although hugely rewarding financially, cannot solve the problem that faces us in Johannesburg.

Such developments deepen the spatial inequalities brought upon us by apartheid planners. Indeed, they are often marketed as "exclusive developments" that when read in the context of the inclusive city we are trying to build, must be questioned.

This is especially so when one considers that, in Johannesburg, 50% of households earn less than R3543 a month while 40% earn less than R2487.

A third of the residents of the city earn less than R2224 a month, with the remaining 25% earning less than R1751 a month.
There is also preliminary evidence that the new-build housing market is already evolving to incorporate lower income housing options, as demand at the high end plateaus, and the vast market for affordable housing is coming into play.

In this context, The City of Johannesburg, through its Development Planning and Housing Departments, is set to introduce an inclusionary housing policy, with the draft currently out for public comment. 

Public input and negotiation is vital, as unless our approach is financially sustainable and indeed profitable for private developers and financiers, it will not deliver the integrated, affordable, low cost housing envisaged.

The draft policy proposes that every new development of 10 dwelling units or more must include 20% inclusionary housing. 
A number of incentives are provided in turn, which include proportional bonuses in development controls, reduction in parking requirements, reductions in parks and bulk infrastructure contributions, and a rates rebate for the inclusionary units.

As the City, we believe that, ideally, inclusionary housing should be affordable for the median or below, where securing access to affordable housing does not exceed 30% of a household's gross income including taxes and insurance for owners, and utility costs. 

This does need to be balanced with affordability for developers, however, and be considered in the context that inclusionary housing will not replace government housing delivery but be a small component of the overall approach.

As such our vision is that inclusionary housing (when managed privately) should cater for households with an income of R7000 or less per month or should fit into published social housing bands.

Accordingly, two management options for inclusionary units are proposed, one being social housing (by a registered social housing institution- SHI) and the other, private ownership and management by the building owner or body corporate, with rents capped at R2100 per month (in 2018 prices, with inflation allowed). A number of design requirements for the units are included too.

I am all too aware of the fact that for us to stand a chance of providing dignified housing to our residents, we must strike a balance between our objective and incentivising business to buy into our plan.

That is why, when drafting this policy, some within the City were of the opinion that it would be prudent to make inclusionary housing a voluntary option for developers.

Studies have shown however that developers are less likely to view inclusionary housing in a favourable light if they have the choice to opt out. The effect of this is that very few inclusionary units would be delivered.

It is for that reason, the City favours an approach which seeks make inclusionary housing a mandatory but incentivised undertaking within the city. 

This is the approach which the City has invited residents and developers to provide comment on. 

Ultimately, we must all ask ourselves, irrespective of our views on how to do business, what kind of city do we want? Do we want to further entrench apartheid spatial planning, or do we want an inclusive city where development will foster economic and racial integration?

It is my view that the majority of us want the latter.

- Mashaba is executive mayor of the City of Johannesburg.

Disclaimer: News24 encourages freedom of speech and the expression of diverse views. The views of columnists published on News24 are therefore their own and do not necessarily represent the views of News24.

Read more on:    herman mashaba  |  city of johannesburg  |  housing
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